Creating an investment portfolio can feel like a incomprehensible task. With thousands of available assets and countless schools of thought about what is best, new investors can be easily overwhelmed. Should one pursue value investing, growth investing, or the new cryptocurrency asset class? Should a young investor have a high tolerance for risk or be more conservative in today’s sky high market valuation environment?
Fortunately, there are solid resources with which any investor can increase their knowledge and sophistication, as they develop a portfolio that will serve them well throughout life. Here are some of the best resources with which to begin.
One of the most novel aspects of online investment is social trading. There are various investment platforms now available online that offer user-made portfolios as single packages, which new investor can buy up as they like.
Social media conversation surrounding portfolios of this type can be a great way for newbies to learn from more experienced investors. These services also provide excellent charts and visuals, which the new investor can use to better understand how these investments have performed over time and may perform in the future.
Discussion Forums Online
“Do your own research” is one of the investment adages most commonly repeated on the internet. It bears repeating because new investors are often impressed by investment media (like cable TV and investment advertising) that might sell investments as a “sure thing”, when in fact no experienced investor would take them seriously. Independent online forums are a great way for the beginner to learn. It’s important to read a diversity of opinions while still learning, so as not to become convinced by a wrongheaded line of thinking for lack of voices of reason.
And while the internet has no shortage of profoundly bad investment advice, there are still a lot of smart people out there, eager to help. Seek them out and you’ll find investors more than willing to share their best tactics with you.
Books and Classes
Sooner or later, anyone wishing to become a sophisticated investor will want to read classic investment books. Very often, the best investment advice ever given was first written decades ago. And just because it isn’t new doesn’t mean it’s not still relevant. So much of an investor’s success depends on applied knowledge – for instance, the ability to analyze financials and fundamentals, being able to mathematically prove that a security is a good or bad deal.
Good classes will be available at your local community college, or in more informal settings. Sometimes, getting into a real room with people can increase your capacity to learn, as you make friends and feel a sense of healthy competition to absorb the material the best.
It has been said that knowledge is power, and nowhere is this more true than in the world of investment. Get yours however you can.
Tax Protected Investment Accounts
If you don’t already take advantage of tax protected investment accounts (like an IRA, or a 401(k) at work), you’re very much leaving money on the table. These accounts were enabled by the government to allow regular people to invest without paying the same tax burden that wealthy people do. It’s a way to get ahead and develop wealth. But you’ve got to start early to make them pay off. If you do nothing else from this list, start an IRA today.
Investing really isn’t that complicated if you’re willing to learn the basics. Of course, you can take it to high levels of sophistication, but most people can do very well with a little work and commitment. Start now, learn everything you can, make a solid plan, and stick to it. Your portfolio should perform very well for years to come.